{"id":321415,"date":"2025-12-02T22:36:16","date_gmt":"2025-12-02T22:36:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/321415\/"},"modified":"2025-12-02T22:36:16","modified_gmt":"2025-12-02T22:36:16","slug":"the-canada-alberta-deal-is-good-policy-and-probably-good-politics-too","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/321415\/","title":{"rendered":"The Canada-Alberta deal is good policy, and probably good politics, too"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Prime Minister Mark Carney and Alberta Premier Danielle Smith are betting that there are more votes to be gained in the middle ground than there are to be lost on the fringes.Jeff McIntosh\/The Canadian Press<\/p>\n

Everyone could find something to hate about the energy agreement \u2013 technically, the Canada-Alberta Memorandum of Understanding<\/a> \u2013 Mark Carney and Danielle Smith struck last week. <\/p>\n

For the right, the conditions on federal support for a heavy oil pipeline from Alberta to the West Coast \u2013 notably, a tightened provincial carbon pricing regime \u2013 are too onerous<\/a>, if not altogether unnecessary<\/a>. For the left, it is the pipeline\u2019s costs that are too great: not only in itself, but also in the form of federal emissions regulations that were traded away as part of the deal.<\/p>\n

As for the scorekeepers in the pundit class, several were agreed that Mr. Carney and his closest advisers had been snookered, politically. All they would achieve by their concessions to Alberta is to run into a brick wall of opposition from British Columbia and Indigenous groups, divide the federal Liberals<\/a>, and raise the federal NDP from the grave. Not to mention sink Liberal support in Quebec, especially after the resignation<\/a> of former environment minister Steven Guilbeault from cabinet.<\/p>\n

Whew. Apparently Mr. Carney, the former Goldman Sachs dealmaker, is a terrible negotiator, exceeded in incompetence only by Ms. Smith, who was roundly booed for her efforts at the United Conservative Party convention the next day<\/a>. Each, it seems, gave away the store to the other. <\/p>\n

Or perhaps they are not such simpletons as all that.<\/p>\n

Carney to address AFN amid criticism over major projects, Indigenous consultation<\/a><\/p>\n

Hodgson goes to B.C. to meet with Eby as fall-out from Alberta deal continues<\/a><\/p>\n

What, first, is the nature of those concessions? The cap on emissions in the oil and gas sector the feds have agreed to scrap has been estimated<\/a> to cost at least $800 per tonne of emissions averted, just in compliance costs, and as much as $2,887 per tonne when all economic losses<\/a> are considered. Likewise, the federal clean electricity regulations<\/a> from which Alberta would be spared imply compliance costs, even on the government\u2019s own numbers<\/a>, of more than $200 per tonne \u2013 much more, if economic losses are included.<\/p>\n

By comparison, carbon pricing is a steal \u2013 even at the much-elevated price the two governments have agreed to. The $130 price mentioned in the agreement is a minimum price, not a ceiling; and it is the market price of a credit, not the \u201cheadline\u201d or compliance price (the penalty a company would have to pay if it neither reduced its emissions nor bought credits on the market). Credits are currently trading<\/a> at about $20 to $25 on Alberta\u2019s Technology Innovation and Emissions Reduction market, so this represents about a sixfold increase. <\/p>\n

But what\u2019s to prevent Ms. Smith from agreeing to carbon pricing now, then scrapping it after the pipeline is built? Two things. One, the \u201cfinancial mechanism\u201d mentioned in the MOU is code for \u201ccarbon contracts for difference\u201d: a kind of futures contract, protecting firms that invest in lower emissions from being left holding the bag should carbon pricing be scrapped or lowered at some future date (as the government would then have to pay the difference between the actual and projected price).<\/p>\n

And two: the pipeline only proceeds if the Pathways carbon-capture-and-storage project does \u2013 the agreement is explicit on this. And Pathways is only feasible at a carbon price of at least $130 a tonne. No carbon pricing, no Pathways; no Pathways, no pipeline. Alberta hasn\u2019t just given a political commitment to carbon pricing. It\u2019s baked into the whole deal.<\/p>\n

But what about the politics? Certainly it will not be easy to bring the government of B.C. on board, though Premier David Eby has already signalled his acquiescence<\/a> (he cannot legally block it) so long as the tanker ban off B.C.\u2019s north coast is maintained. That\u2019s doable: the pipeline could take a different route, or regulations of equivalent effect could be implemented, much as Alaska did after the Exxon Valdez disaster.<\/p>\n

Indigenous groups, likewise, can in principle be compensated (again, they have no veto in law) by being given a share of the equity in the project. Not every group will be mollified, but not every group has to be: only a politically critical mass.<\/p>\n

Essentially, both Mr. Carney and Ms. Smith have, in their different ways, made the same bet: that there are more votes to be gained in the middle ground than there are to be lost on the fringes. <\/p>\n

Whatever pains the deal may cause for Mr. Carney in B.C. (where a majority<\/a> is in support of the project) or Quebec (where Mr. Guilbeault is half as popular<\/a> as Mr. Carney), or with the still-leaderless NDP, these must be set against the opportunity to steal the centre-right vote from Conservative Leader Pierre Poilievre, and possibly reinvent the Liberals in Western Canada.<\/p>\n

As for Ms. Smith, the deal offers a way out of the trap in which she is now caught<\/a>, as the darling of a separatist movement that is widely rejected in the province. Those boos? I\u2019m guessing they were music to her ears.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Prime Minister Mark Carney and Alberta Premier Danielle Smith are betting that there…\n","protected":false},"author":2,"featured_media":321416,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[28472,49,48,20754,28473,44,927],"class_list":["post-321415","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-andrew-coyne","tag-ca","tag-canada","tag-column","tag-coyne","tag-news","tag-opinion"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/321415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=321415"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/321415\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/321416"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=321415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=321415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=321415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}